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Major Factors That Can Impact Your Car Insurance Rates

Driving history isn't the only thing companies look at when creating your policy

AARP reported last year that the average car insurance policy was priced 3.8 percent higher in April 2011 than it had been in April 2010. With this across-the-board increase, it's even more important to understand how auto insurance policy rates are determined and what you can do to keep yours affordable.

Car insurance underwriters evaluate many different factors when determining whether to issue a policy and how much premium to charge. Some of the major factors include the following:

Driving history: Auto insurance companies will request a copy of your Motor Vehicle Report/Record (MVR) to get a clear picture of your driving history. This will show them any reported accidents you've caused as well as any tickets you've received (speeding, parking in a no-parking zone, running a red light, etc.). While parking tickets may not cause your car insurance rates to rise, running a red light or speeding might, so the type of incident listed on your report really makes a difference.

Age: Younger drivers can be a higher risk for car insurance companies because they have less experience in proactively avoiding accidents and reacting to unsafe drivers. They also may be more likely than an older driver to take risks than an older driver.

Type of car: Some cars are targets for vandalism and theft, so you may find that your insurance company charges you higher rates for a certain make or model. Another important factor is the safety features built into the vehicle. Those makes or models without automatic seatbelts, side and front airbags, antilock brakes, and other safety features may see a higher premium; on the other hand, the more safety and antitheft devices your car has, the more discounts you qualify for.

Claims: If you have a lot of car insurance claims, your insurance company might raise your rates come renewal time. This is because you are proving yourself to be a higher risk than the company initially assumed.

Credit rating: Some insurers in certain states will check a new applicant's credit rating and use that (at least partially) to determine rates. The lower your credit rating is, the higher risk the insurer will assume you present, based on studies done about credit and car insurance claims.

Considering all the different factors that go into determining rates and the many different coverage options to work with, it may be difficult to create an appropriate policy without the advice of a seasoned professional. We can help you find auto insurance rates that fit your budget while still providing the benefits you and your family need. Stop by or give us a call today.